The controversial tax measure is said to have led to 10 suicides of people facing “huge and wholly unaffordable bills” from the retrospective course of action.

The debate was set through Parliament’s Backbenchers Business Committee, which gives opportunities to backbench Members of Parliament to bring forward debates of their choice. Members proposing the debate were Sammy Wilson, Democratic Unionist Party MP for East Antrim, Sir Mike Penning, Conservative MP for Hemel Hempstead, Marion Fellows, Scottish National Party MP for Motherwell and Wishaw, and Greg Smith, Conservative MP for Buckingham. They are calling for a full independent investigation, including into the conduct of HM Revenue & Customs (HMRC), into the Loan Charge. 

It is understood that the Loan Charge debate will likely not start until the afternoon. Follow the House of Commons X account for when the debate starts, and the debate can be watched back later on Parliament TV.

The Loan Charge was introduced in the Finance (no. 2) Act 2017 and is a charge on all payroll remuneration through loans made since 1999, in the form of a 45% charge on all loan payments in that time. This charge is levied as a back tax and demanded by HM Revenue & Customs in one tax year, 2019-20. 

“Anyone who has ever been employed through such a structure will be hit with a retrospective charge in the 2018-19 tax year in one go, meaning huge and wholly unaffordable bills,” as described by Parliament’s Loan Charge and Taxpayer Fairness All-Party Parliamentary Group (APPG).

The proposal for the debate says: “That this House is deeply concerned that HMRC has confirmed the suicides of 10 people facing the Loan Charge and that, despite the Morse Review, thousands face unaffordable demands, with the risk of further suicides; notes that HMRC has also confirmed 24 cases of serious harm, including 13 suicide attempts; believes that many people who used schemes were victims of mis-selling, and that in other cases employers and agencies pushed people into using them, yet HMRC is demanding all disputed tax from scheme users, not from those who recommended, promoted and operated the schemes.”

It goes on to point out further “that section 44 of the Income Tax (Earnings and Pensions) Act 2003 deems agency workers to be taxable as employees of those agencies and that HMRC should have collected tax from agencies at the time; criticises HMRC transferring the liability to individuals despite its own failures; observes that HMRC is pursuing open enquiries for schemes before 2011 despite the Morse Review; also notes that HMRC is seeking additional payments from those who settled; further believes that the Morse Review was limited and not genuinely independent of the Treasury and HMRC; highlights the resolution proposed by tax professionals; calls on the government to work with all parties to find a fair resolution and for a full independent investigation, including into the conduct of HMRC; and believes that taxpayer rights must be enshrined in law and enquiries closed after four years if HMRC fails to act”.

In September 2019, then-Chancellor Sir Sajid Javid commissioned Sir Amyas Morse to lead an independent review into the disguised remuneration loan charge. Sir Amyas was asked to consider whether the policy is an appropriate response to the tax avoidance behaviour in question, and whether the changes the government has announced to support individuals to meet their tax liabilities have addressed any legitimate concerns raised. In their proposal, the backbenchers calling for the debate claim the Morse Review was “limited and not genuinely independent of the Treasury and HMRC”.

Some commentators have compared the impact of the Loan Charge on those required to pay thousands of pounds to HMRC to the Post Office sub-postmasters’ long-running issues with the Post Office.

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